US Airways Files for Bankruptcy Protection

[jtf]

This isn't meant to bash anyone- I'm just curious how much protection the current Mesa contract has for the current pilot group with reguards to JO starting a new certificate (or buying someone else cheap) in order to try to fly 73s (or anything else for that matter) for less than the current group will agree to. I hope it is a pretty iron-clad agreement, but JO is one sneaky SOB. I most definitely want USAirways to survive, but if they don't and JO wants to get some bigger airplanes to fill the void, I certainly hope that the current pilots are protected from any more whipsawwing and that they will be able to get reasonable pay (whatever that is) for larger aircraft.

 

[MW44]

I thought the whole point of accepting the less than desirable pay rates was to get iron clad scope to prevent another Freedom fiasco?

 

[Jeff Helgeson]

You are all full of it! Just shut the He!! up and send me a check, gear up!

Everyone needs to read the following

Nuts! (The story about SWA and how other carriers tried to put them out of business is especially interesting).

Flying the Line Vol I and II - the ultimate guide to union negotiations at any carrier where the management/pilot relationship is less than "friendly".

Hard Landing - explains very nicely what deregulation has done to this industry.

If you haven't read those yet, taking notes and filing for future use, then QUIT BASHING OTHER AIRLINES!! Number one, it accomplishes nothing (similar to PFT - you're not going to convince anyone of anything on here 99% of the time, even if your argument is correct), Number two, an uneducated debater is going to lose, Number three, your time could be put to better use AT YOUR OWN CARRIER! Volunteer to a committee or if you want nothing to do with your union, go work at a homeless shelter or something. Make the world a better place through action, not rhetoric.

Or, alternately, you could go into politics if you like to debate all day long - CSPAN has great coverage of it... Maybe you can be the catalyst for pension reform - God knows we need it.

My mommie's calling - I have to do my chores (don't you just love when the caller I.D. comes up "xyz Airline Crew Scheduling"?) Fly safe, and try to remember we got into this because we like flying... pause for a minute in cruise at sundown, take a deep breath, and just ENJOY!

That's all I gotta say about that!

 

[halfmoon]

This is getting nastier every day!!

EMBRAER suspends all deliveries to USAIR untill they can prove to a court they are capable of repayments.. oh boy, whats next? This is getting really nasty!!

 

[banned username 1]

The Laws of Unintended Consequences

Everybody thought back in 1977 when deregulation was finanlized that was going to be the best thing that ever happened to the travelling public. I'll let you each come to your own conclusions- especially if you broaden your viewpoint to "maximum".

There was only one person that could spin gold from straw and that was Rumplestilskin. What other commodity can you name that costs the same in today's dollars as it did in 25 years' ago dollars? That money is coming from somewhere- it's just not seen from where. It's coming out of people's hides.

I can tell you that I've personally "donated" to the great experiment in many different forms as well as countless thousands of others have. The latest, and probably not the last consequence will be the strapping of Uncle Sam with $20 Billion worth of pension obligations. Ironically, the money that the taxpayer screams about will be a fraction of what the recipient was counting on for their retirement. And then it will have come around "full circle". The travelling public who benefitted from deregulation and it's consequences will become participants again- on the other side of the "equals" sign this time. So much for gloating over your $99 transcon ticket and complaining about the meal service.

Others would say that why should ours be immune from the ills that have befallen other industries? I don't know. I guess I'm just selfish- just like you, and airline management, and unions, and LCC workers, and legislators, and bankers, and Lorenzo, and PFT pilots, and the travelling public, and...and... where's my hunting rifle? I feel like I'm "Falling Down". I just want to go home!

Best of luck to the USAirways guys.

UAL78

 

[miles otoole]

What other commodity can you name that costs the same in today's dollars as it did 25 years' ago dollars?
UAL78

Microprocessors and general personal computing power comes to mind. The things get faster and faster and the prices go down and down. As long as there are a group of people who see dollar signs (management AND pilots), there will be a concerted effort to do it faster, better, and cheaper. It's all about the marketshare. Capitalism and unions are like oil and water.

 

[PCL_128]

Microprocessors and general personal computing power comes to mind. The things get faster and faster and the prices go down and down. As long as there are a group of people who see dollar signs (management AND pilots), there will be a concerted effort to do it faster, better, and cheaper. It's all about the marketshare. Capitalism and unions are like oil and water.

The difference between air travel and semi-conductor manufacturing is quite obvious: the costs to produce semi-conductors has gone done with the retail prices, the price of operating an airline has not.

The same is true of oil prices. People cry about $40/ barrel oil, but the truth is that oil should cost about $60-$70/ barrel when corrected for inflation. The difference again is the cost to produce a barrel of oil. The overhead for the oil companies has dropped steadily and the prices have followed with a steady and healthy profit margin.

The airline industry is not the same way. Seat mile costs haven't changed that much over the years. There aren't too many variable costs in the transportation industry. Virtually everything is dependent on external factors. Comparing the airlines to semi-conductor companies is a faulty analogy.

 

[banned username 1]

Ha! Ya got me. Yes that's cheaper. If only technology could be introduced into the airline industry at the same level and intensity as it has in the computer industry. Unfortunately it can't happen until massive paradigm shifts and technology devised from not yet imagined ideas are implemented.

The oil and water is comparing the computer hardware industry and the airline industry. I stand by my assertion/rant.

Leave it to a F/O to save me- again. Well said. My point exactly.


UAL78

 

[MLBWINGBORN]

Not to mention that the greatest cost of any mass produced product is labor.

Where are most of the computers being built these days?

If you can find a computer company thats building them here,then i bet most of the parts are built somewheres else.

Mexico and the far east are the largest sources of both built and computer parts in the world.

They also happen to have little or no unions/organized labor.

In some cases, the lowering of the labor cost of producing a product has a positive effect on the market.
But only if the market is not in the same part of the world as the labor force producing it.

We as a industry have over the last say 25 to 30 years, put into place work rules and compensation that are sustainable in only the very best of times.

We have for the most part completely ignored the forces driving the marketplace that create the very cyclic nature of our industry.

We have taken advantage of and nearly beaten to death some of our very best customers.Hoping they will return to a flawed product like so many sheep.

This plus the managments position of planning for the best and hoping the worst doesnt happen has led us to where we are now..

As much as I hate to say it,we did it too ourselves.

While eveyone is talking about the race to the bottom,no one seems to care about where we should have been in the first place.
Why not ask the question of what the market forces will bear before being forced to consider that question in BK?

Why not ask what impact a contract will have long term as opposed to forcing the company to take a contract through labor action.
Knowing fully well at some put you may have to give it all back in BK or give backs.?

The airline industry has been on its behind for at least 7 to 10 years from the standpoints of effective control of costs,profitibilty, and compensation in relation to the financial health of the company.

Companies being forced to bow down to labor with industry leading contracts in times when they are losing money is insane.

Companies using BK to pound labor into submission is just as insane.

This business is insane and we brought it all on ourselves.

So,the next time anyone of you experts wants to point a finger somewhere..

I suggest you stand in front of a mirror first.

Mike

 

[AcroChik]

Sen Rick Santorum Blames Pilots For Bankruptcy?

This story appeared today on TheStreet.com:

http://www.thestreet.com/_htmlbtb/markets/dumbestgm/10183139.html

 

[MLBWINGBORN]

Finally..A writer that sees a little bit of the truth behind such stupid comments made by a leader in our goverment.

I like him.This week at least.

Mike

 

[banned username 1]

This business is insane and we brought it all on ourselves.

So,the next time anyone of you experts wants to point a finger somewhere..

I suggest you stand in front of a mirror first.

Mike

I believe that's what I meant when I implied that the laws of unintended consequences meet human nature. I just want to be clear that in the face of huge Federal deficits that you are sending back any Income Tax refunds, right? ;-)

Be well,
UAL78

 

[MLBWINGBORN]

UAL78.

Nice to hear from you after a long absence.I look forward to your comments always.

As for my tax refund.
If you are suggesting that I return my refund to help the goverment prop up this failing industry of ours..Sorry..I am of the faith that believes that the market should be allowed to run its course.

Every time we try to resist,alter,or artificially create un-natural market conditions, the results are always far worse than if we had allowed the weak and wounded to fail.

The current over capacity situation with several airlines in or near BK, is a prime example of what happens when a failed business model is allowed to continue to take up market share through goverment backed loans and the financial benefits BK affords.

In the end the public suffers due to the tax burden,the workers suffer due to a loss of job security and benefits,and the airline industry suffers because the required market adjustments after a long period of imbalance are almost always deadly for several airlines.

Sound managment practices,control of costs,a reasonable price for a given service,and a constant eye on the future is a proven business model.

It is my personal belief that every time we step off the path of sound business models or continue to force a faulty business model on any market, the market as a whole suffers.

A T Rex is neat.

But I do believe that the world is much better off with out them.

Mike

 

[d.fitz]

Hey MLBWINGBORN!

That was probably the best and, I think, most accurate assessments of the airlines problems. I agree completely.

Just thought I'd let you know - its pretty rare to see any sanity here : )

 

[Lear70]

Every time we try to resist,alter,or artificially create un-natural market conditions, the results are always far worse than if we had allowed the weak and wounded to fail.

Creating unnatural market conditions through government-subsidized loans and grants has definitely been one of the "big loser ideas" in aviation history, but regulation is another story.

Regulation created unnatural market conditions and how can the "result" of failing carriers, loss of service to hundreds of cities, loss of jobs numbering in the hundreds of thousands, and costs to taxpayers of hundreds of millions, if not billions be worse than higher ticket prices required during regulation?

The current over capacity situation with several airlines in or near BK, is a prime example of what happens when a failed business model is allowed to continue to take up market share through goverment backed loans and the financial benefits BK affords.

Another result of deregulation.

In the end the public suffers due to the tax burden,the workers suffer due to a loss of job security and benefits,and the airline industry suffers because the required market adjustments after a long period of imbalance are almost always deadly for several airlines.

Another result of deregulation.

Sound managment practices,control of costs,a reasonable price for a given service,and a constant eye on the future is a proven business model.

That's exactly why this industry is headed back to a state that will require regulation or the resultant loss of service to many vital communities and many international destinations. Airline management left to its own devices, with the exception of a few LCC's, has shown they will NOT make sound business decisions.

The best part of that quote is in the last paragraph: "a reasonable price for a given service." The legacy carriers have been pricing their "product" so far under their "cost" for so long that there's no way they could ever expect to remain in business for the long-term. Even if the wages for ALL labor groups at the legacy carriers were adjusted to any of the LCC's wage equivalents, those carriers would STILL be in the red because of the staffing needed for hub operations, cost of operating separate fleet types, and management over-staffing and salaries. THAT'S why U can't exit BR, why US went back in a 2nd time, and why D is on the precipice.

The LCC's can't service everywhere, the government can't allow more than two or three Legacy carriers to fall (the loss of service would initiate such a huge public outcry that it would become central campaign issues, especially since the LCC (for the most part) have NO international service), so we're left with a conundrum: continue unregulated operations, watch our legacy carriers fall like dominoes, lose service to many communities, and watch the eventual market adjustment that will result in increased ticket prices in markets where there is no longer competition but keep ticket prices low in markets served by LCC's, or re-regulation that will retain vital markets but increase ticket prices sooner and probably higher for everyone, including the LCC's.

Sucks to have no good solutions...

By the way, you're exactly right about computer parts. The only parts that are made stateside are the LCD's. The vast majority are produced in San Jose, CA (silicon valley) and are shipped to Mexico for assembly where the electronic parts have already been made by low-cost workers (or imported from Taiwan, etc), then they're sent back stateside for final production (product stickers, branding, etc). That's why it's usually cheaper to replace your entire laptop than just replacing the LCD - its the most expensive component of the laptop because it's made by U.S. workers earning a liveable wage instead of child/slave labor in some 3rd world country.

 

[MLBWINGBORN]

Ummm?

I guess it was that overnight at the Holiday Inn last night.

Thanks for your kind words..

Mike